The Impact of Trade Liberalization on the Indonesian Palm Oil and Coconut Oil Markets

Abstract

In general, palm oil producers and crude palm oil exporters benefitted from the removal of the export tax. The government lost tax revenues and palm oil consumers suffered accordingly. However, the reduction in welfare to consumers was rather small due to an increase in the substitution between palm and coconut oil, and the reduced level of governmental activity in the palm oil market prior to the removal of the tax.